Missing middle’ and the Indian economic slowdown: A causal study
Angira Singh, Meenakshi Sinha Swami
Growth and development in all major economies across the globe, is supported by the three pillars which comprise of agriculture, manufacturing and services. All the three sectors are important and the general progression in an economy as it develops is a move from the primary sector to the secondary and then to the tertiary sector. Industry plays a vital role in the growth and development of a country. Industrial growth the quality of life would lack basic necessities. Agriculture, by and large, offers the essentials of life. Industry, on the other hand, caters to diverse human needs, improving life much beyond the parameters of survival. Industrialisation enhances productivity, raises per-capita income and accelerates saving and capital formation and increases employment. Missing middle is the middle sector of the economy, or the industrial and manufacturing sector, which has been conspicuous with its absence or lack of strength in the Indian economy on the basis of its contribution to GDP and Employment. Secondly ‘missing middle’ is the missing or absence of the medium-sized industries in the Indian Industrial sector. India is unique in having jumped from the agriculture sector to the services sector of the economy. Objective of this study is to examine the ‘missing middle’ as a cause of economic slowdown. This study also tries to analyse the reason behind the ‘missing middle’ and tries to explore the cause for the ‘middle middle’ in the Indian economy. Research is designed through secondary data sourced from the Indian economic survey, World Bank, and other sources to find the impact and cause for the ‘missing middle’ situation on the Indian Economy as a whole. ‘Missing middle’ is a cause of concern for the Indian Economy. Contribution of industrial and manufacturing sector could have and should have been large and is a lacuna which it alone can fill and provide a much-needed fillip to the slowing Indian economy.